Australia—AI adoption creates benefits and challenges for businesses

A recent CSIRO report shows that 68% of Australian businesses have already implemented Artificial Intelligence (AI) technologies and a further 23% are planning to implement in the next 12 months (Chart). The rise of emerging technologies, particularly AI, can provide operational benefits to businesses, helping them boost revenue and improve cyber safety and security. AI can help businesses analyse data more efficiently and strengthen their understanding of export markets and consumer preferences. For instance, Australian companies report earning an average of $500,000 in revenue from customer service bots that enhance the customer experience through around the clock support, improved response times and personalised product recommendations. AI can also help businesses anticipate demand for their products and adjust their supply chain accordingly, mitigating costs from over- or understocking. Automation of administrative processes can also reduce menial tasks, help businesses save time and improve labour productivity. The CSIRO finds that, on average, respondents reported time savings of 30% across all AI-related initiatives. Goldman Sachs suggest AI adoption could lift global productivity growth by 1.5 percentage points over a 10-year period and drive a 7% (or US$7 trillion) increase in global GDP. 

The adoption of emerging technologies also creates challenges for businesses. Delivery of AI projects in Australia is complex requiring most businesses to engage at least four AI service providers. Businesses are concerned about the potential for AI to introduce new security threats, poor data quality and privacy concerns over customer information. Talent and skills shortages for implementing and operating AI systems exacerbate the concerns of businesses. More broadly, late adopters of AI—typically emerging markets that dominate Australia’s largest export markets—are likely to benefit significantly less than early adopters in terms of productivity, profitability and wages, according to McKinsey.